Unrealized Losses Trading and Available-for-Sale Securities
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1. Unruh Corp. began operations in 2007. An analysis of Unruh's equity securities portfolio acquired in 2007 shows the following totals at December 31, 2007 for trading and available-for-sale securities:
Trading Available-for-Sale
Securities Securities
Aggregate cost $90,000 $110,000
Aggregate fair value 65,000 95,000
What amount should Unruh report in its 2007 income statement for unrealized holding loss?
a. $40,000.
b. $10,000.
c. $15,000.
d. $25,000
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Solution Summary
This solution discusses how unrealized losses on trading and available-for-sale securities are reported for financial reporting purposes.
Solution Preview
The difference between the cost basis and the fair market value on trading securities is recorded on the income statement as an unrealized gain or loss. ...
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